Military families remain easy prey for ID theft

Social Security numbers still present on many military IDs

A quiet war on the homefront is being waged against U.S. military members, veterans and their families, targeting their bank accounts, credit histories and identities.

A 2013 Federal Trade Commission study found that military consumers reported identity theft at
twice the rate of the general public. In retaliation, experts are urging
military members and their families to adopt both a stealthy defense and firm
offense against identity thieves.

A war for numbersAbove all, ID thieves covet Social
Security numbers. With them, "they have the keys to the kingdom," says Scott
Higgins, a Vietnam veteran and CEO of Veterans Advantage, a company that
partners with corporations to provide military members with preferred pricing
on goods and services.

Until recently, all military IDs were tied
to SSNs and were relatively easy to for a thief to obtain. In contrast to the
general population, which is taught to be intensely protective of personal and financial identity, military personnel are accustomed to providing
their identity frequently and on demand.

"Our SSN was our name, our identifier, and
we'd give it out like it was nothing," says Jeff
Rose, financial planner and author of "Soldier of Finance," who also served nine years in the Army National
Guard. "It
was no big deal."

Except
that is a big deal. Because when stolen, thieves with SSNs can quickly open
accounts such as credit cards and loans in the serviceperson's name. "They run
them up, don't pay the bill, and the debt ends up on the victim's TransUnion,
Experian and Equifax reports," says security expert Robert Siciliano. "That's
when the person's credit is damaged."

The problem, however, is not all the
cards have been replaced and won't be for another few years. The DOD maintains
that it will take four years for the transition -- which began in 2011 -- to be completed. With nearly 1.5 million Americans
currently on active duty and just over 21 million veterans plus spouses and
children who use military identification, that
leaves millions of the old military IDs in rotation.

Recently there has been a
proliferation of Internet startups that directly advertise military discounts
for veterans. Most are, in reality, data grabs.

--
Scott Higgins
CEO, Veterans Advantage

Additionally, while Veterans
Identification Cards (VICs) are no longer being issued with SSNs displayed,
those numbers are still embedded in the magnetic stripe. According to the
Veteran Administration's Boston office, "Bar code readers, including those available as
applications on cellphones, can scan the bar code on the front of the card,
and reveal the Veteran's Social Security number." A multiyear phase-out of those cards began in 2012.

Therefore, a significant pool of
potential victims remains. The situation is poised to worsen, too, contends
Higgins: With troops withdrawn from Iraq and leaving Afghanistan, "we believe there
will be an increase in ID theft."

How thieves obtain service member
identities
Thieves employ several methods with
which to rob service members and their relatives of their identities. One is to
lure them into retail establishments with promises of deep military discounts.
Disreputable employees request the person's government ID and then make a copy
or write down the numbers. If it still has the SSN printed on the card, they'll
either sell it to a ring of criminals or use the numbers themselves.

Online
shopping is becoming especially problematic. "Recently there has been a
proliferation of Internet startups that directly advertise military discounts
for veterans," says Higgins. "Most are, in reality, data grabs." Such companies
set up false retail websites, advertise directly to the military and instruct
the service members to type in their military ID number in order to receive the
deal. If the ID still reflects the service member's SSN, at that point their
identity is compromised and new account fraud typically follows.

Identity theft crimes against the
military population can go undetected for years. Holly Petraeus, assistant
director of the Consumer Financial Protection Bureau's Office of Servicemember
Affairs, cites a typical service member's existence: "Military personnel live a
mobile lifestyle punctuated by combat deployments, and that makes it hard for
them to keep a close eye on their finances -- or to fix the fallout from an
identity theft. They may not even realize their identity has been stolen
for some time, giving the fraudster ample time to do significant damage."

Credit destructionmay impede a burgeoning military career. "The damage it can
cause to a service member's credit file can lead to the revocation of a
security clearance," says Petraeus. A credit report that's riddled with unpaid
debts calls the person's loyalty into question. Proving innocence can be tough
and time consuming.

The pain it causes the victim can be
extreme. "Unless you've had your identity stolen, you don't know how bad it
is," says Higgins. "It hurts your chance of getting a home or getting a loan
for education. You can even be arrested a crime you didn't commit."

Fighting ID
theft before and after the strike
To thwart thieves from striking,
Higgins warns service members and their families to be on guard when asked to
present their military IDs to retailers. Never provide your SSN or a card that
has it listed, your birth date, mother's maiden name or other highly sensitive
personal information to obtain a merchant discount. Not only is it unnecessary,
it's considered an 'overreaching data' requirement.

Military personnel live a mobile lifestyle punctuated by combat
deployments, and that makes it hard for them to keep a close eye on their
finances -- or to fix the fallout from an identity theft.

--Holly Petraeus
Office of Servicemembers Affairs

"This is a reminder to check your credit
report for fraud at least once a year," says Rose. "It takes 15 minutes out of
your day. If you're on deployment or a mission where you won't be available to
check, have your spouse or a trusted loved one do it. The longer fraudulent
activity goes on, the worse it is to get out." Consumers can pull their credit
reports from each of the big three credit bureaus for free once a year at
AnnualCreditReport.com.

Place
an "Active Duty Alert" on your credit file, too, suggests Rip Mason, CEO of LegalShield, a legal services and identity theft protection provider. It's
one of the most important things military personnel can do to protect their
file. "The alert requires creditors to take steps to verify your identity
before granting credit in your name," says Mason. "It lasts for a year, but can
be renewed. To do this, call the fraud department of one of the credit
reporting companies. They must contact the other two for you."

Siciliano encourages military members
to go even further
and lock down their credit files altogether. Contact the credit reporting bureaus and request a security freeze.
After it's in
place, all access to the reports will be denied, thus preventing new loans or
lines of credit from being granted
without your express permission.

Service members might want to also
invest in a reputable ID theft protection program, says Siciliano. These
companies monitor credit reports for illegal activity, and if there is a
strike, they'll take action. "Hire a professional company. It's faster and more
efficient than doing it yourself. Undoing damage can take an hour or 600 hours
or anything in between. It's an insurance policy."

In the end, though, says Higgins,
protecting your identity and credit is your responsibility and your best
arsenal against attack: "This is a message to everyone, including civilians.
You don't need to give your SSN out, and usually shouldn't. Be careful and
cautious."

Published: February 14, 2014

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